We had some EUR positive Fundamentals last week that helped the pair to extend the gains from the week before ( or better to say USD negative )
- The Nonfarm Payroll report
- The Federal Reserve was less hawkish than anticipated,
- EUR/USD is up for a third consecutive week but buying interest remains reluctant.
Coming week lacks any important data, so we can expect the market to behave more technically.
Major levels of the interest on Weekly chart are:
Supports at :
1.07350 , 1.07150 , 1.06750 and 1.06500
Resistances at :
1.07900, 1.08150 and 1.08500
As you can see on the weekly chart above, what we saw in last 3 weeks is just a consolidation phase , and before the Major downtrend line taken out ( 1.08500 ) we can expect ( and be aware of ) possible turn of tables – EURUSD can reverse and go for the Supports.
Even the break of 1.08500 wouldn’t mean that we are gunning for UP – there is still 1.10350 that can cool off any Bull excitement .
However, we are talking about almost 200 pips of possible extension, and no one in their right mind would hold on such a short position.
In my opinion, we need the third wave Down to either conclude that Supports are holding and we can start the Up run, or lost of those supports , followed by decisive break of 1.04900 – that would speed up the downtrend action and lead us to around 1.01000 area.
All that said, we are moving to 4h chart, to be able to establish the Action plan.
If 1.07500 lost, we will have a downward Wave, with following Supports:
1.07350, 1.07150, 1.06500 – The last line of defence!
If 1.07500 holds the ground, we can expect attacks at 1.07900 and 1.08150 consequently.
Monday morning UK is closed, so before USA opens later on, I don’t expect much action.
Depending on the developments, I’ll post updates on our Forum .
My trading system is based on 30 min chart, and even in low liquidity markets it is always possible to catch some fish…be it a sardine if nothing better 😀
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